Greater Edmonton Market Fragmenting Substantially


2016’s year-end numbers reflect a lot of changes in the greater Edmonton new home market and not a lot of them are good. Technically, we are likely at the mid-way point in Alberta’s latest economic swoon, however, the anticipated recovery is likely going to be slow and bumpy. The latest #CSG builder market share numbers also show an emerging trend that is not all that good for long time industry participants. The old leaders are being torn down and new market leaders are emerging. Now, market share changes are nothing new in any industry but the dramatic scale of change is something to be considered. If we go back to historic numbers in 2007 and 2008, the top two market leaders of the day had total market share values of about 11%. Today, the top two market leaders have share per cent ages of 8.5% and 7.9% respectively.

This change in trend indicates that new market entrants, changing retail demands and conditions, buyer behavioural changes and the switch from single family dominance to multi-family have caused material upheaval in greater Edmonton’s share numbers and there is likely more to come.

Recessions are always a great time for strong brands to get stronger while the fringe players usually take a beating. Hence, Qualico (made up of five branded builders) maintains its position at the top of the industry while Brookfield Homes has emerged as a clear runner up within striking distance of the leader. This is in stark contrast to their seventh place position in 2012. Everyone else is falling far behind with no one holding even a 3% share.  

2017 will be another year of big industry change and challenges and your need to protect and build market share in these tough economic times has never been greater. To get your company solidly positioned to benefit from industry changes, the anticipated recovery, as it unfolds, and emerging opportunities, contact Consumer Strategies Group to get the latest research, digital strategies and tactics, and marketing support required to move your brand’s market share needle up the ladder.


This Can't Be Good!


Canada's housing watchdog is warning a rapid rise in interest rates would be far more devastating for the domestic housing market than oil at US$20 per barrel or an economic depression.   

In its latest round of stress tests, the Canada Mortgage and Housing Corporation said on Thursday a sudden increase in borrowing costs could lead to a 30 per cent drop in home prices, and even the failure of a Canadian financial institution. 

That so-called “reverse stress” scenario was based on a cumulative 240-basis point rise in rates over two quarters in 2016 and 2017.

“An interest rate change of that magnitude within such a short period really means a complete collapse of the bond market,” cautioned Peter Norman, chief economist at Altus Group, in an interview with BNN. 

The housing agency also tested its mortgage loan insurance and securitization businesses against several other scenarios including different changes in the unemployment rate and home prices.
  
In the case of a high-magnitude earthquake, CMHC says home prices could dip 0.6 per cent and unemployment could peak at 8.4 per cent. Meanwhile, an oil price shock could lead to a 7.8 per cent drop in home prices and unemployment at 8.8 per cent. A deflation-induced depression could take home prices down 25 per cent and cause the unemployment rate to hit 13.5 per cent, according to the agency.

CMHC said its mortgage insurance business could incur $1.13 billion in losses in the event of a sudden rise in rates, but that it could withstand the hit. A spokesman for the agency stressed that the scenario is an "extreme case" and would be unprecedented.

Interest rates have started to go up this week as a sell-off in the U.S. bond market has driven bond yields higher, making it more expensive for banks to access capital.

Two of Canada's biggest banks -- TD Bank (TD.TO 0.17%) and Royal Bank (RY.TO 1.59%) -- have hiked their fixed mortgage rates, anywhere from 0.05 percentage points to 0.4 percentage points.

There are concerns that as interest rates rise, some Canadian homeowners could encounter difficulty making their mortgage payments and face the risk of default.

"Households are so leveraged right now and house prices are at such incredibly high levels relative to household incomes," said David Madani, senior Canada economist at Capital Economics.

"Even a moderate doubling in interest rates -- which sounds like a lot but we're talking about maybe 200 basis points (two percentage points) -- could potentially pop the housing bubble."
CMHC said its capital holdings were sufficient to withstand all scenarios it tested. None of the scenarios should be considered a prediction or forecast, the agency added.

"Stress testing involves searching out extreme scenarios that have a very remote chance of happening and planning for them," Romy Bowers, CMHC's chief risk officer, said in a statement.

"Rigorous stress testing is an essential part of our risk management program and allows CMHC to evaluate its capital levels against these scenarios."

Written by The Canadian Press 
Voted One Of Canada’s Best Outdoor Creatives


Astral Media, the outdoor division of Bell Media Canada, is one of Canada’s largest and most respected advertising companies hosting over 30,000 billboards across every region of the country from British Columbia to the Maritimes. It is also Canada’s pre-eminent airport advertising authority. As such, it deals with hundreds of local, regional and national advertising agencies submitting thousands of creative executions each month on behalf of their customers. Bell Media judges all of these billboards each month across the country and selects the very finest for public recognition. 


We are pleased to announce that Consumer Strategies Group’s (CSG) creative has been selected as one of four finalists for August’s Best “Out of Home “national creative from across Canada. The other finalists include Coca Cola, Quebec Lotteries and Samsung S7.

From thousands of billboards submitted nationally, a group of creative and agency professionals voted the “Guided Walking Tour” creative to be among the best for creative concept and design excellence. The billboard, created for Canada Lands Company’s fall campaign, was conceptualized and written by Creative Director, Jim Malner and designed and art directed by Marcus Jeffery. 

We continually strive to better serve our clients strategically, tactically and creatively, and it is great to have CSG team members acknowledged for their creativity and excellent work.
Edmonton CMA Top 10 Builders  - Q1 2016

After the first quarter of 2016, the Qualico Group of builders leads the Edmonton Census Metropolitan Area (CMA) with 308 permits. Q1 April 2015 recorded 5,536 permits in the Edmonton CMA compared to 3,231 in Q1 2016 – a nearly 42% decrease.
Yet, there are the proverbial green shoots beginning to appear and the impact of the devastating Fort McMurray fire could prove to be a net positive to greater Edmonton housing.  What is interesting is the dramatic shifts in market share. 10 years ago the top three builders would have controlled about 30% of the total market whereas today it’s not even 20%. This indicates our market is becoming far more fragmented by new, smaller builders in Edmonton that are taking share from the larger builders. These builders are often new entrants to the market like Morrison Homes and Brookfield Residential from Calgary and Mattamy Homes from Toronto.TI)
TOP B UILDERS BY TOTAL PERMITS PULLED (SINGLE & MULTI)
TOP BUILDERS BY TOTAL PERMITS PULLED (SINGLE & MULTI)

Builder
Total Permits (Single & Multi)
Market Share YTD
1
Qualico Group (Augusta, Sterling, Pacesetter, Connect, Streetside)
308
9.5%
2
Brookfield Residential
246
7.6%
3
Daytona Homes Master Builder
109
3.4%
4
Homes by Avi (Edmonton) Inc.
104
3.2%
5
Landmark Group of Companies
84
2.6%
6
Jayman BUILT
79
2.4%
7
Coventry Homes Inc.
76
2.4%
8
Regency Developments
57
1.8%
9
Dolce Vita Homes LP
54
1.7%
10
Lincolnberg Homes
46
1.4%

TOP BUILDERS BY SINGLE PERMITS PULLED

Builder
Single Permits Pulled
Market Share YTD
1
Qualico Group (Augusta, Sterling, Pacesetter, Connect)
132
4.1%
2
Jayman BUILT
69
2.1%
3
Coventry Homes Inc.
66
2.0%
4
Landmark Group of Companies
54
1.7%
5
Brookfield Residential
53
1.6%
6
Homes by Avi (Edmonton) Inc.
49
1.5%
7
Daytona Homes Master Builder
38
1.2%
8
Dolce Vita Homes LP
38
1.2%
9
Morrison Homes
32
1.0%
10
Parkwood Master Builder Inc.
23
0.7%

TOP BUILDERS BY MULTI PERMITS PULLED

Builder
Multi Permits Pulled
Market Share YTD
1
Brookfield Residential
193
6.0%
2
Qualico Group (Sterling, Pacesetter, Connect, Streetside)
176
5.4%
3
Daytona Homes Master Builder
71
2.2%
4
Homes by Avi (Edmonton) Inc.
55
1.7%
5
Regency Developments
36
1.1%
6
Landmark Group of Companies
30
0.9%
7
Lincolnberg Homes
24
0.7%
8
Rohit Group of Companies
24
0.7%
9
Carrington Group ( Carrington Communities)
22
0.7%
10
Cameron Homes Inc.
20
0.6%